(Boise) – The State of Idaho has reached a $13 million settlement with pharmaceutical manufacturer Eli Lilly and Company, Attorney General Lawrence Wasden said. The settlement resolves the state’s allegations that Eli Lilly engaged in deceptive marketing of the anti-psychotic drug Zyprexa and failed to warn health care providers of serious side effects, resulting in significant costs to Idaho Medicaid. The monetary payment is the state’s largest financial recovery under the Idaho Consumer Protection Act, other than the 1998 tobacco settlement.

Zyprexa is the brand name for the prescription drug Olanzapine. Zyprexa is approved by the U.S. Food and Drug Administration (FDA) for treatment of certain severe psychological disorders.

In its complaint, the state alleged that Eli Lilly marketed Zyprexa for off-label uses, including to children, and failed to adequately disclose Zyprexa’s side effects to health care providers. The state also alleged that users of Zyprexa suffered weight-gain related effects such as hyperglycemia and diabetes. The state additionally alleged that Eli Lilly’s actions caused added medical expense for many Idaho Medicaid participants, resulting in higher Medicaid expenditures for the state.

“Off-label uses” are uses that are not approved by the FDA. While a physician is allowed to prescribe drugs for off-label uses, federal law prohibits pharmaceutical manufacturers from marketing their products for off-label uses.

“Off-label promotion of pharmaceutical drugs is a deceptive practice and creates unnecessary risks to consumers,” Attorney General Wasden said. “In this instance, the company’s practices also resulted in additional costs to Idaho Medicaid, at the expense of Idaho taxpayers. Fortunately we were able to reach this settlement and recover those taxpayer dollars.”

Other settlement terms mandate that Eli Lilly shall not make any false, misleading or deceptive claims regarding Zyprexa, and take certain actions relating to dissemination of medical information, continuing medical education and grants, payments to consultants and speakers, product samples, and clinical research.

The $13 million recovered by the Attorney General is for losses incurred by Idaho's Medicaid program and consumer protection damages. The settlement does not address claims that individual consumers may have. Multiple private class action cases, seeking to recover damages for individuals, have been filed against Eli Lilly.

Idaho’s settlement, which is subject to court approval, includes the state's expenses incurred during the three years the case was investigated and litigated in various federal and state courts. Because the federal government pays a large percentage of the cost of Idaho Medicaid, a portion of the settlement will be used to reimburse the federal government. The Attorney General anticipates that approximately $6.9 million will be deposited into the State’s general account.

The agreement, which is subject to court approval, involves no admission of wrongdoing on Eli Lilly’s part.